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General Motors' Cruise Suspends Nationwide Self-Driving Operations as California Revokes Permit; Independent Review Initiated

Cruise vehicles reportedly required remote human intervention every 2.5 to 5 miles, and the company incurred a loss of $700 million in Q3 due to expansion plans, raising questions about the viability of the company's autonomous vehicle technology and its leadership's approach towards safety and regulatory compliance.

Overview

  • Following a series of accidents, including one in which a Cruise vehicle dragged a pedestrian for 20 feet after a collision, Cruise's permit to operate its driverless fleet in California was suspended by the Department of Motor Vehicles, prompting the company to voluntarily suspend all of its driverless operations nationwide.
  • Cruise's board has engaged the law firm Quinn Emanuel to investigate the company's responses to regulators investigating the accidents, including the interactions with regulators, law enforcement and the media, and technology consultancy Exponent to assess Cruise's technology systems.
  • Cruise's rapid expansion and aggressive approach towards testing its autonomous vehicles in complex environments may have prioritized speed over safety, leading to the company's current challenges.
  • The suspension of operations and the potential fallout from regulatory investigations are raising concerns about Cruise's financial viability; the company lost over $700 million in the third quarter of 2023 due to increased spending to expand operations to 15 U.S. cities.
  • Despite these challenges, General Motors CEO Mary Barra has stated that the company's commitment to Cruise remains firm, and there are plans in place to finance and support Cruise's growth.